Exhibit 3.1
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Delaware
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Page 1
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The
First State
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I,
JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF
THE CORRECTED CERTIFICATE OF “ACKRELL SPAC PARTNERS ICO.”, FILED IN THIS OFFICE ON TWENTY-NINTH DAY OF DECEMBER, A.D.
2020, AT 4:07 O’CLOCK P.M.
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/s/
Jeffrey W. Bullock
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Jeffrey
W. Bullock, Secretary of State
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7051176 8101
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Authentication: 204439244
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SR# 20208783579
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Date: 12-29-20
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You may verify this certificate online at corp.delaware.gov/authver.shtml
STATE
OF DELAWARE
CORRECTED
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
ACKRELL
SPAC PARTNERS I CO.
Ackrell
SPAC Partners I Co., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,
does hereby certify that:
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1.
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The
name of the corporation is Ackrell SPAC Partners I Co. (the “Company”).
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2.
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That
an Amended and Restated Certificate of Incorporation (the “Certificate”)
was filed with the Secretary of State of Delaware on December 21, 2020 and that said
Certificate requires correction as permitted by Section 103 of the General Corporation
Law of the State of Delaware.
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3.
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The
inaccuracy of said Certificate is as follows: The amount to be deposited into the Trust
Account in connection with an extension of the period of time to consummate a Business
Combination was incorrectly stated.
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4.
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As
a result of such inaccuracy, the complete Certificate is attached hereto as Exhibit
A.
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IN
WITNESS WHEREOF, said corporation has caused this Certificate to be filed on this 29th day of December, 2020.
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ACKRELL
SPAC PARTNERS I CO.
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By:
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/s/
Long Long
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Name:
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Long
Long
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Title:
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Chief
Financial Officer
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State of Delaware
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Secretary of State
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Division of Corporations
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Delivered 04:07 PM 12/29/2020
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FILED 04:07 PM 12/29/2020
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SR 20208783579 - File Number 7051176
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Exhibit
A
Amended
and Restated Certificate of Incorporation
(Attached)
AMENDED
AND RESTATED
CERTIFICATE
OF INCORPORATION
OF
ACKRELL
SPAC PARTNERS I CO.
Pursuant
to Sections 242 and 245 of the
Delaware
General Corporation Law
Ackrell
SPAC Partners I Co., a corporation existing under the laws of the State of Delaware (the “Corporation”), by
its Chief Executive Officer, hereby certifies as follows:
1.
The name of the Corporation is “Ackrell SPAC Partners I Co.”
2.
The Corporation’s Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware
on September 11, 2018 under the name “Able Acquisition Corp.”
3.
The Corporation’s Certificate of Incorporation was amended on September 30, 2019.
4.
This Amended and Restated Certificate of Incorporation restates, integrates and amends the amended Certificate of Incorporation
of the Corporation.
5.
This Amended and Restated Certificate of Incorporation was duly adopted by joint written consent of the directors and stockholders
of the Corporation in accordance with the applicable provisions of Sections 141(f), 228, 242 and 245 of the General Corporation
Law of the State of Delaware (“DGCL”).
6.
The text of the Amended Certificate of Incorporation of the Corporation is hereby amended and restated to read in full as follows:
FIRST:
The name of the corporation is Ackrell SPAC Partners I Co. (hereinafter sometimes referred to as the “Corporation”).
SECOND:
The registered office of the Corporation is to be located at c/o Corporation Service Company, 251 Little Falls Drive, in the City
of Wilmington, County of New Castle, State of Delaware, 19808. The name of its registered agent at that address is Corporation
Service Company.
THIRD:
The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized under
the DGCL. In addition to the powers and privileges conferred upon the Corporation by law and those incidental thereto, the Corporation
shall possess and may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment
of the business or purposes of the Corporation including, but not limited to, a Business Combination (as defined below).
FOURTH:
The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 101,000,000
of which 100,000,000 shares shall be Common Stock of the par value of $.0001 per share and 1,000,000 shares shall be Preferred
Stock of the par value of $.0001 per share.
A. Preferred
Stock. The Board of Directors is expressly granted authority to issue shares of the Preferred Stock, in one or more series,
and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating,
optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed
in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “Preferred
Stock Designation”) and as may be permitted by the DGCL. The number of authorized shares of Preferred Stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority
of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in
the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or
any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.
B. Common
Stock. Except as otherwise required by law or as otherwise provided in any Preferred Stock Designation, the holders of the
Common Stock shall exclusively possess all voting power and each share of Common Stock shall have one vote. The
holders of shares of Common Stock shall not have cumulative voting rights.
FIFTH:
Intentionally Omitted.
SIXTH:
The introduction and the following provisions (A) through (J) of this Article Sixth shall apply during the period commencing upon
the filing of this Amended and Restated Certificate of Incorporation and terminating upon the consummation of any Business Combination
(defined below) and no amendment to this Article Sixth shall be effective during the Target Business Acquisition Period (defined
below) unless approved by the affirmative vote of the holders of at least a majority of the then outstanding shares of Common
Stock. Notwithstanding the foregoing, if the Corporation seeks to amend any of the foregoing provisions other than in connection
with a Business Combination, the Corporation will provide holders of IPO Subunits (defined below) with the opportunity to convert
their IPO Subunits in connection with any such vote as described in paragraph C below. The “Target Business Acquisition
Period” shall mean the period from the effectiveness of the registration statement on Form S-1 (“Registration
Statement”) filed with the Securities and Exchange Commission (“Commission”) in connection with the
Corporation’s initial public offering (“IPO”) up to and including the first to occur of (a) a Business
Combination or (b) the Termination Date (defined below).
“Business
Combination” shall mean any merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization
or other similar business combination involving the Corporation and one or more businesses or entities (“Target Business”
or “Target Businesses”). So long as the Corporation’s securities are listed on a national securities
exchange, the Target Business or Target Businesses acquired in the Business Combination must together have a fair market value
of at least 80% of the assets held in the Trust Account (defined below), excluding taxes payable on the income earned on the Trust
Account, at the time of the signing of the definitive agreement governing the terms of the initial Business Combination. If the
Corporation acquires less than 100% of the equity interests or assets of a Target Business, the portion of such Target Business
that the Corporation acquires is what will be valued for purposes of the 80% fair market value test.
The
“fair market value” for purposes of this Article Sixth will be determined by the Board of Directors of the
Corporation based upon one or more standards generally accepted by the financial community (such as actual and potential sales,
earnings, cash flow and/or book value). If the Board of Directors is unable to independently determine the fair market value of
the Target Business, the Corporation will obtain an opinion from an independent investment banking firm, or another independent
entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria.
A.
Prior to the consummation of any Business Combination, the Corporation shall either (i) submit such Business Combination to its
stockholders for approval (“Proxy Solicitation”) pursuant to the proxy rules promulgated under the Securities
Exchange Act of 1934, as amended (“Exchange Act”) or (ii) provide all holders of its Common Stock included
in the IPO Subunits with the opportunity to sell their subunits to the Corporation, effective upon consummation of such Business
Combination, for cash through a tender offer (“Tender Offer”) pursuant to the tender offer rules promulgated
under the Exchange Act.
B.
If the Corporation engages in a Proxy Solicitation in connection with any proposed Business Combination, the Corporation will
consummate such Business Combination only if a majority of the then outstanding shares of Common Stock present and entitled to
vote at the meeting to approve the Business Combination are voted for the approval of such Business Combination.
C.
In the event that a Business Combination is approved in accordance with the above paragraph (B) and is consummated by the Corporation,
any holder of shares of Common Stock included in the subunits sold in the IPO (the “IPO Subunits”) may demand
that the Corporation convert the holder’s IPO Subunits into cash. If so demanded, the Corporation shall, promptly after
consummation of the Business Combination, convert such shares into cash at a per share price equal to the quotient determined
by dividing (i) the amount then held in the Trust Account (defined below) net of taxes payable, calculated as of two business
days prior to the consummation of the Business Combination, by (ii) the total number of IPO Subunits then outstanding (such price
being referred to as the “Conversion Price”). “Trust Account” shall mean the trust account
established by the Corporation pursuant to a trust agreement (“Trust Agreement”) at the consummation of its
IPO and into which a certain amount of the net proceeds of the IPO and simultaneous private placement is deposited, all as described
in the Registration Statement. The Corporation may require any holder of IPO Subunits who demands that the Corporation convert
such IPO Subunits into cash to either tender such holder’s certificates to the Corporation’s transfer agent at any
time prior to the vote taken at the stockholder meeting relating to such Business Combination or to deliver their shares to the
transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System at any
time prior to the vote taken at the stockholder meeting relating to such Business Combination, with the exact timing of the delivery
of the IPO Subunits to be set forth in the proxy materials relating to such Business Combination.
D.
If the Corporation engages in a Tender Offer, the Corporation shall file tender offer documents with the Commission which will
contain substantially the same financial and other information about the Business Combination as is required under the proxy rules
promulgated under the Exchange Act and that would have been included in any proxy statement filed with the Commission in connection
with a Proxy Solicitation, even if such information is not required under the tender offer rules promulgated under the Exchange
Act. The per-share price at which the Corporation will repurchase the IPO Subunits in any such Tender Offer shall be equal to
the Conversion Price. The Corporation shall not purchase any shares of Common Stock other than IPO Subunits in any such Tender
Offer.
E.
The Corporation will only consummate a Business Combination if it has net tangible assets of at least $5,000,001 either immediately
prior to or upon consummation of such Business Combination.
F.
In the event that the Corporation does not consummate a Business Combination by 12 months after the consummation of the IPO (or,
if the Office of the Delaware Division of Corporations shall not be open for business (including filing of corporate documents)
on such date the next date upon which the Office of the Delaware Division of Corporations shall be open) (or such later date pursuant
to the extension set forth under this paragraph, the “Termination Date”), the Corporation shall (i) cease all
operations except for the purposes of winding up, (ii) as promptly as reasonably possible but not more than ten (10) business
days thereafter, redeem 100% of the IPO Subunits for cash for a redemption price per share equal to the amount then held in the
Trust Account, less any interest for any income or other taxes payable, divided by
the total number of IPO Subunits then outstanding (which redemption will completely extinguish such holders’ rights
as stockholders, including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to approval of the Corporation’s then stockholders
and subject to the requirements of the DGCL, including the adoption of a resolution by the Board pursuant to Section 275(a) of
the DGCL finding the dissolution of the Corporation advisable and the provision of such notices as are required by said Section
275(a) of the DGCL, dissolve and liquidate, subject (in the case of clauses (ii) and (iii) above) to the Corporation’s obligations
under the DGCL to provide for claims of creditors and other requirements of applicable law. In the event that the Corporation
has not consummated an initial Business Combination within 12 months from the date of the closing of the IPO, the Board of Directors,
may, if requested by Ackrell SPAC Sponsors I LLC, the sponsor of the Corporation (the “Sponsor”), extend the
period of time to consummate a Business Combination up to two times, each by an additional three months, for an aggregate of six
additional months, provided that (i) the Sponsor (or its affiliates or permitted designees), upon five days of advance notice
prior to the applicable Termination Date, will deposit into the Trust Account $1,200,000 (or up to $1,380,000 if the underwriters’
over-allotment option is exercised in full) for each such extension in exchange for a non-interest bearing, unsecured promissory
note and (ii) the procedures relating to any such extension, as set forth in the Trust Agreement, shall have been complied with.
The gross proceeds from the issuance of such promissory note(s) shall be held in the Trust Account and used to fund the conversion
of the IPO Subunits in accordance with this Article Sixth. If the Corporation completes its initial Business Combination, it will
repay the amounts loaned under the promissory note out of the proceeds of the Trust Account released to it. If the Corporation
does not complete a Business Combination by the Termination Date, the loans will not be repaid.
G.
A holder of IPO Subunits shall be entitled to receive distributions from the Trust Fund only in the event (i) such holder demands
conversion of his shares in accordance with paragraph C above in connection with any Proxy Solicitation, (ii) such holder sells
the holder’s shares to the Corporation in accordance with paragraph D above in connection with any Tender Offer, (iii) that
the Corporation has not consummated a Business Combination by the Termination Date or (iv) the Corporation seeks to amend the
provisions of this Article Sixth prior to the consummation of a Business Combination. In no other circumstances shall a holder
of IPO Subunits have any right or interest of any kind in or to the Trust Fund.
H.
Unless and until the Corporation has consummated its initial Business Combination as permitted under this Article Sixth, the Corporation
may not consummate any other business combination transaction, whether by merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or other similar business combination, transaction or otherwise. The Corporation shall not consummate
a Business Combination with an entity that is affiliated with any of the Corporation’s officers, directors or sponsors unless
the Corporation has obtained an opinion from an independent investment banking firm or another independent entity that commonly
renders valuation opinions that such a Business Combination is fair to the Corporation (or its stockholders) from a financial
point of view and a majority of the Corporation’s disinterested independent directors approve such Business Combination.
I.
Prior to the consummation of a Business Combination, the Board of Directors may not issue any securities which participate in
or are otherwise entitled in any manner to any of the proceeds in the Trust Account or which vote as a class with the Common Stock
on any matter.
J.
The Board of Directors shall be divided into three classes: Class A, Class B and Class C. The number of directors in each class
shall be fixed exclusively by the Board of Directors and shall be as nearly equal as possible. At the first election of directors
by the incorporator, the directors elected by the incorporator shall serve as Class C directors for a term expiring at the Corporation’s
third Annual Meeting of Stockholders. The Class C directors shall then appoint additional Class A, Class B and Class C directors,
as necessary. The directors in Class A shall be elected for a term expiring at the first Annual Meeting of Stockholders, the directors
in Class B shall be elected for a term expiring at the second Annual Meeting of Stockholders and the directors in Class C shall
be elected for a term expiring at the third Annual Meeting of Stockholders. Commencing at the first Annual Meeting of Stockholders,
and at each annual meeting thereafter, directors elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding annual meeting of stockholders after their election. Except as the DGCL may otherwise
require, in the interim between annual meetings of stockholders or special meetings of stockholders called for the election of
directors and/or the removal of one or more directors and the filling of any vacancy in that connection, newly created directorships
and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause, may
be filled only by the vote of a majority of the remaining directors then in office, although less than a quorum (as defined in
the Corporation’s Bylaws), or by the sole remaining director. All directors shall hold office until the expiration of their
respective terms of office and until their successors shall have been elected and qualified. A director elected to fill a vacancy
resulting from the death, resignation or removal of a director shall serve for the remainder of the full term of the director
whose death, resignation or removal shall have created such vacancy and until his successor shall have been elected and qualified.
SEVENTH:
The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
A.
Election of directors need not be by ballot unless the by-laws of the Corporation so provide.
B.
In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly
authorized to make, alter and repeal the by-laws of the Corporation, subject to the power of the stockholders of the Corporation
to alter or repeal any by-law whether adopted by them or otherwise.
C.
The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders
or at any special meeting of the stockholders called for the purpose of considering any such act or contract, and any contract
or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the Corporation which is
represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders
be there represented in person or by proxy), unless a higher vote is required by applicable law, shall be as valid and binding
upon the Corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the Corporation,
whether or not the contract or act would otherwise be open to legal attack because of directors’ interests, or for any other
reason.
D.
In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered
to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless,
to the provisions of the statutes of the State of Delaware, of this Amended and Restated Certificate of Incorporation, and to
any by-laws from time to time made by the stockholders; provided, however, that no by-law so made shall invalidate any prior act
of the directors which would have been valid if such by-law had not been made.
EIGHTH:
A. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper
personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability
of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted
by the DGCL, as so amended. Any repeal or modification of this paragraph A by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation with respect to events occurring prior to the time of such repeal
or modification.
B.
The Corporation, to the full extent permitted by Section 145 of the DGCL, as amended from time to time, shall indemnify all persons
whom it may indemnify pursuant thereto. Expenses (including attorneys’ fees) incurred by an officer or director in defending
any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director may be entitled
to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by the Corporation as authorized hereby.
NINTH:
Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between
this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may,
on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any
receiver or receivers appointed for this Corporation under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this Corporation under Section 279 of Title 8 of the Delaware
Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation,
as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise
or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the
said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class
of stockholders, of this Corporation, as the case may be, and also on this Corporation.
TENTH:
A. Forum. Subject to the last sentence in this Section 10.A, and unless the Corporation consents in writing to the
selection of an alternative forum, to the fullest extent permitted by the applicable law, the Court of Chancery of the State of
Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative
action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed
by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii)
any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of
the DGCL or this Amended and Restated Certificate of Incorporation or the Bylaws, or (iv) any action asserting a claim against
the Corporation, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware,
the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except
any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not
subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction
of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a
court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction.
Notwithstanding the foregoing, (i) the provisions of this Section 10.A will not apply to suits brought to enforce any liability
or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction and (ii) unless
the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States
of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting
a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.
B.
Consent to Jurisdiction. If any action the subject matter of which is within the scope of Section 10.A immediately above is
filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of
any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal
courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 10.A immediately
above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such
FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
C.
Severability. If any provision or provisions of this Amended and Restated Certificate of Incorporation shall be held
to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to
the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and
of the remaining provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each portion
of any sentence of this Section 10.C containing any such provision held to be invalid, illegal or unenforceable that is not itself
held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances
shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares
of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 10.C.
ELEVENTH:
The doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any
of its officers or directors in circumstances where the application of any such doctrine would conflict with any fiduciary duties
or contractual obligations they may have as of the date of this Amended and Restated Certificate of Incorporation or in the future.
In addition to the foregoing, unless the Corporation and a director or officer of the Corporation otherwise agree in writing,
the doctrine of corporate opportunity shall not apply to any other corporate opportunity with respect to any of the directors
or officers of the Corporation unless such corporate opportunity is offered to such person solely in his or her capacity as a
director or officer of the Corporation and such opportunity is one the Corporation is legally and contractually permitted to undertake
and would otherwise be reasonable for the Corporation to pursue.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Stephen N.
Cannon, its Chief Executive Officer, as of the 21st day of December, 2020.
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/s/ Stephen N. Cannon
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Stephen
N. Cannon
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Chief
Executive Officer
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Exhibit
99.1
ACKRELL SPAC PARTNERS I CO.
INDEX
TO BALANCE SHEET
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Ackrell SPAC Partners I Co.
Opinion on the Balance Sheet
We have audited the accompanying balance
sheet of Ackrell SPAC Partners I Co. (the “Company”) as of December 23, 2020, and the related notes. In our opinion,
the balance sheet presents fairly, in all material respects, the financial position of the Company as of December 23, 2020, in
conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
The balance sheet is the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s balance sheet based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the balance sheet is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain
an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures
to assess the risks of material misstatement of the balance sheet, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the balance sheet. Our audit also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the balance sheet. We believe that our audit provides a reasonable basis for
our opinion.
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/s/ UHY LLP
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We have served as the Company’s auditor since 2019.
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New York, New York
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December 30, 2020
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ACKRELL
SPAC PARTNERS I CO.
(f.k.a. ABLE ACQUISITION CORP.)
Balance
Sheet
December
23, 2020
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Assets:
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Cash
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$
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714,315
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Total current assets
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714,315
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Cash held in Trust Account
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139,380,000
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Total assets
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$
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140,094,315
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Liabilities and Stockholders’ Equity:
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Accrued expenses
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$
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—
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Total current liabilities
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—
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Total liabilities
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—
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Commitments and Contingencies
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|
|
Common stock subject to possible redemption, 13,375,674 shares (at
redemption value of approximately $10.10/share)
|
|
|
135,094,307
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding
|
|
|
—
|
|
|
Common stock, $0.0001 par value, 100,000,000 shares authorized, 4,793,326 shares issued and outstanding
|
|
|
479
|
|
|
Additional paid-in capital
|
|
|
5,007,859
|
|
|
Accumulated deficit
|
|
|
(8,330
|
)
|
|
Total stockholders’ equity
|
|
|
5,000,008
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
140,094,315
|
|
The accompanying notes are an integral part of the balance sheet.
ACKRELL
SPAC PARTNERS I CO.
(f.k.a. ABLE ACQUISITION CORP.)
NOTES
TO BALANCE SHEET
Note
1—Description of Organization and Business Operations
Organization
and General
Ackrell
SPAC Partners I Co. (formerly Able Acquisition Corp.; the “Company”) is a blank check company formed under the laws
of the State of Delaware on September 11, 2018. The Company was formed for the purpose of entering into a merger, share exchange,
asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses
or entities (the “Business Combination” or “Initial Business Combination”). The Company has selected
December 31 as its fiscal year end.
While
the Company may pursue a business combination target in any industry or geographical location, the Company intends to focus its
search for businesses in the branded Fast-Moving Consumer Goods industry that are compliant with applicable laws and regulations
within the jurisdictions in which they are located or operate.
As
of December 23, 2020, the Company had not commenced any operations. All activity through December 23, 2020 relates to the Company’s
formation and the Initial Public Offering (“IPO”) described below. The Company will not generate any operating revenues
until after the completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income
in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.
Financing
The
registration statements for the Company’s IPO were declared effective on December 21, 2020. On December 23, 2020, the
Company consummated the Initial Public Offering of 13,800,000 units (the “Public Units”), which included the full
exercise of the underwriter’s overallotment option, generating gross proceeds of $138,000,000, which is described in
Note 3.
Simultaneously
with the closing of the IPO, the Company consummated the sale of 539,000 units (the “Private Units”) at a price of
$10.00 per unit in a private placement to the Company’s sponsor (Ackrell SPAC Sponsors I LLC; the “Sponsor”)
and EarlyBirdCapital, Inc. (“EBC”), generating gross proceeds of $5,390,000, which is described in Note 4.
Transaction
costs amounted to $3,292,623, consisting of $2,760,000 of underwriting discount and $532,623 of other offering costs. In addition,
$714,315 of cash was held outside of the Trust Account (as defined below) and is available for working capital purposes.
Trust
Account
Following
the closing of the IPO on December 23, 2020, an amount of $139,380,000 ($10.00 per Unit) from the net proceeds of the sale of
the Public and Private Units in the IPO and private placement was placed in a trust account (“Trust Account”) which
will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act, with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of (a) the
completion of the Company’s Initial Business Combination, (b) the redemption of any Public Subunits (as described in Note
3) properly submitted in connection with a stockholder vote to amend the Company’s certificate of incorporation, or (c)
the redemption of the Company’s Public Subunits if the Company is unable to complete the Initial Business Combination within
the Combination Period (as defined below).
Initial
Business Combination
The
Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to
at least 80% of the balance in the Trust Account (net of taxes payable) at the time of the signing an agreement to enter into
a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company
owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is
no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its stockholders
with the opportunity to redeem all or a portion of their Public Subunits included in the Public Units sold in the IPO upon the
completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination
or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their
Public Subunits for a pro rata portion of the amount then on deposit in the Trust Account (initially approximately $10.10 per
share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to
pay its tax obligations).
The Company will have 12 months from the
closing of the IPO to consummate a Business Combination with an opportunity to extend the period of time up to two times each by
an additional three months (for a total of up to 18 months to complete a business combination) (the “Combination Period”),
subject to the sponsor depositing into the Trust Account, on or prior to the applicable deadline, additional funds of $1,380,000 ($0.10 per unit) for each of the available
three-month extensions. If the Company is unable to consummate a Business Combination within the Combination Period, the Company
will redeem 100% of the outstanding Public Subunits for a pro rata portion of the amount then on deposit in the Trust Account (initially
approximately $10.10 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its tax obligations).
The
Sponsor, EarlyBirdCapital and the Company’s officer and directors have agreed to (i) waive their conversion rights with
respect to their Founder Shares, Representative Shares and Private Subunits (the “Private Securities”) in connection
with the consummation of a Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account
with respect to their Private Securities if the Company fails to consummate a Business Combination within the Combination Period
and (iii) not to propose an amendment to the Company’s Amended and Restated Memorandum and Articles of Association that
would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Subunits if the Company does
not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their
Public Subunits in conjunction with any such amendment.
Liquidation
The
holders of the Private Securities will not participate in any liquidation distribution with respect to such securities. In the
event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution
(including Trust Account assets) will be less than the $10.10 per Public Unit in the IPO. The Sponsor has agreed that it will
be liable to ensure that the proceeds in the Trust Account are not reduced below $10.10 per Public Subunit by the claims of target
businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or
products sold to the Company. The agreement entered into by the Sponsor specifically provides for two exceptions to the indemnity
it has given: it will have no liability (1) as to any claimed amounts owed to a target business or vendor or other entity who
has executed an agreement with us waiving any right, title, interest or claim of any kind they may have in or to any monies held
in the trust account, or (2) as to any claims for indemnification by the underwriters of this offering against certain liabilities,
including liabilities under the Securities Act. The Company has not asked the Sponsor to reserve for such indemnification obligations,
nor have the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and
believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company believes it is unlikely that
Sponsor will be able to satisfy its indemnification obligations if it is required to do so.
Note
2—Summary of Significant Accounting Policies
Basis
of Presentation
The accompanying
audited balance sheet is presented in U.S. dollars in conformity with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in the Securities Act, as modified by the Jumpstart Our Business
Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not
previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt-out of the extended
transition period and comply with the requirements that apply to non-emerging growth companies but any such an election
to opt-out is irrevocable. The Company has elected not to opt-out of such extended transition period, which
means that when a standard is issued or revised and it has different application dates for public or private companies, the Company,
as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make the comparison of the Company’s financial statement with another public company that is neither an emerging
growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.
Use
of Estimates
The preparation
of this balance sheet in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet.
Making estimates
requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the balance sheet, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could
differ significantly from those estimates.
Cash
and cash equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of December 23, 2020.
Cash
Held in Trust Account
At
December 23, 2020, the assets held in the Trust Account were held in cash.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At December 23, 2020, the Company has
not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Common
Stock Subject to Possible Redemption
The Company accounts
for its shares of common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of common stock subject to mandatory
redemption (if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable shares of common
stock (including shares of common stock that feature redemption rights that are either within the control of the holder or subject
to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary
equity. At all other times, shares of common stock is classified as stockholders’ equity. The Company’s shares of common
stock features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence
of uncertain future events. Accordingly, as of December 23, 2020, 13,375,674 shares of common stock subject to possible redemption
are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s
balance sheet.
Offering
Costs
The
Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A—” Expenses
of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs that are directly related to
the IPO. Offering costs amounting to $3,292,623 (consisting of $2,760,000 in underwriting commissions and $532,623 of other offering
costs) were charged to stockholders’ equity upon the completion of the IPO.
Income
Taxes
The Company accounts for income taxes under
ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both
the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected
future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance
to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also
clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties,
accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as
of December 23, 2020. The Company is currently not aware of any issues under review that could result in significant payments,
accruals or material deviation from its position. The Company has identified the United States as its only “major”
tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income
taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various
tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total
amount of unrecognized tax benefits will materially change over the next twelve months. The provision for income taxes was deemed
to be immaterial as of December 23, 2020.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to
the short-term nature.
Recent
Accounting Standards
In July 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-11, Earnings Per Share (Topic 260), Distinguishing
Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part I. Accounting for Certain Financial Instruments with
Down Round Features; Part II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic
Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this update addresses the complexity
of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments
(or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Also, entities
must adjust their basic Earnings Per Share (“EPS”) calculation for the effect of the down round provision when triggered (that
is, when the exercise price of the related equity-linked financial instrument is adjusted downward because of the down round feature).
That effect is treated as a dividend and as a reduction of income available to common stockholders in basic EPS. An entity will also recognize
the effect of the trigger within equity. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning
after December 15, 2018. The Company adopted this guidance starting on January 1, 2020. The adoption of this guidance will enable the
Company to record the warrants as equity instruments and is not expected to have a material impact on the Company’s financial position,
results of operations, cash flows or disclosures moving forward until a trigger event occurs. Part II of this update addresses the difficulty
of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting
Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable
financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part
II of this update are not expected to have an impact on the Company.
Management does
not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect
on the Company’s balance sheet.
Risks
and Uncertainties
On
January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new
strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak
as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues
to evolve. The impact of the COVID-19 outbreak on the Company’s financial position will depend on future developments,
including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of
the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted.
If the financial markets and/or the overall economy are impacted for an extended period, the Company’s financial position
may be materially adversely affected. Additionally, the Company’s ability to complete an Initial Business Combination may
be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak
or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit
the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s
personnel, vendors and service providers to negotiate and consummate an Initial Business Combination in a timely manner. The Company’s
ability to consummate an Initial Business Combination may also be dependent on the ability to raise additional equity and debt
financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn. The balance sheet does
not include any adjustments that might result from the outcome of this uncertainty.
Management continues to evaluate the impact
of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative
effect on the Company’s financial position and/or search for a target company, the specific impact is not readily determinable
as of the date of the balance sheet. The balance sheet does not include any adjustments that might result from
the outcome of this uncertainty.
Note
3—Initial Public Offering
On
December 23, 2020, the Company sold 13,800,000 Units at a price of $10.00 per Unit, including the issuance of 1,800,000
Units as a result of the underwriters’ full exercise of their over-allotment option (the “Public Units”). Each
Public Unit consists of (i) one Public Subunit, which consists of one Public Share and one-half of one Public Warrant, and
(ii) one-half of one Public Warrant. Each whole warrant entitles the holder to purchase one share of common stock at a price
of $11.50 per share. (see Note 7).
Note
4—Private Placements
Simultaneously
with the closing of the IPO, the Sponsor purchased an aggregate of 539,000 Units, at a price of $10.00 per unit, for an aggregate
purchase price of $5,390,000 (the “Private Units”). A portion of the proceeds from the Private Units were added to
the net proceeds from the IPO held in the Trust Account.
The
Private Units and their underlying securities are identical to the units sold in the Initial Public Offering except the Private
Warrants (as defined in Note 7) will be non-redeemable and may be exercised on a cashless basis. The purchasers of the Private
Units have agreed not to transfer, assign or sell any of the Private Units or underlying securities (except to the same permitted
transferees as the insider shares) until the completion of the Business Combination.
If
the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Units
will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).
Note
5—Related Party Transactions
Founder
Shares
On
September 11, 2018, the Company issued 3,737,500 shares of common stock to its initial stockholder (the “Founder Shares”),
Able SPAC Holding LLC, for $5,000 in cash, or approximately $0.0013 per share, in connection with formation (See Note 7).
On
November 25, 2020, the Sponsor contributed back to the Company, for no consideration, 862,500 shares of Founder Shares for cancellation,
resulting in an aggregate of 2,875,000 Founder Shares outstanding.
On December 21, 2020, the Company effected
a stock dividend of 0.2 shares of common stock for every share of common stock outstanding, resulting in an aggregate of 3,450,000
Founder Shares outstanding.
Founder Shares, subject to certain limited
exceptions contained in prospectus, will not be transferred, assigned, sold or released from escrow for a period ending on the
six-month anniversary of the date of the consummation of the Initial Business Combination or earlier if, subsequent to its
Initial Business Combination, the Company consummates a liquidation, merger, stock exchange or other similar transaction which
results in all of the stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Promissory
Note — Related Party
The Sponsor had
agreed to loan the Company an aggregate of up to $300,000 to be used for the payment of costs related to the IPO. The promissory
note was non-interest bearing, unsecured and was due on the earlier of December 31, 2020 and the closing of the IPO.
As of December
23, 2020, the Sponsor had loaned $300,000 to the Company and the Company repaid the Sponsor in full the $300,000 from the proceeds
of the Initial Public Offering not being placed in the Trust Account on December 23, 2020.
Administrative
Services Agreement
Commencing
on the effective date of the IPO through the acquisition of a target business, the Company has agreed to pay an affiliate of the
Company’s Chairman an aggregate fee of $10,000 per month for providing the Company with office space and certain office
and secretarial services. This arrangement will terminate upon completion of the Company’s Initial Business Combination
or the distribution of the Trust Account to the Company’s public stockholders.
Working
Capital Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor may, but is not obligated
to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination,
the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the
Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but
no proceeds held in the Trust Account would be used to repay the Working Capital Loans, other than the interest on such proceeds
that may be released for working capital purposes. Except for the foregoing, the terms of such Working Capital Loans, if any,
have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be
repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of
such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit.
As of December 23, 2020, no Working Capital Loans were outstanding.
Note
6—Commitments and Contingencies
Registration
Rights
The
holders of the Founder Shares, Private Units (and their underlying securities), Representative Shares (See Note 7) and any
Units that may be issued upon conversion of the working capital loans (and their underlying securities) will be entitled to registration
rights pursuant to an agreement to be signed prior to or on the effective date of the IPO. The holders of a majority of these
securities will be entitled to make up to two demands that the Company register such securities. The holders of the majority of
the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which
these shares of common stock are to be released from escrow. The holders of a majority of the Private units and units issued in
payment of working capital loans made to the Company (or underlying securities) can elect to exercise these registration rights
at any time after the Company consummates an Initial Business Combination. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the Company’s consummation of an Initial Business Combination.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
On
December 23, 2020, the underwriters were paid a cash underwriting fee of 2% of the gross proceeds of the IPO, totaling $2,760,000.
Business
Combination Marketing Agreement
The
Company has engaged EarlyBirdCapital as an advisor in connection with the Company’s business combination to assist the Company
in holding meetings with the Company’s stockholders to discuss the potential business combination and the target business’
attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection
with the Company’s Initial Business Combination, assist the Company in obtaining stockholder approval for the business combination
and assist the Company with its press releases and public filings in connection with the Initial Business Combination. The Company
will pay EarlyBirdCapital a cash fee for such services upon the consummation of the Company’s Initial Business Combination
in an amount equal to 3.5% of the gross proceeds of the IPO (exclusive of any applicable finders’ fees which might become
payable); provided that up to 30% of the fee may be allocated at the Company’s sole discretion to other FINRA members (including,
with EarlyBirdCapital’s prior consent which shall not be unreasonably withheld, companies affiliated with the Company or
the Company’s officers or directors, including Ackrell Capital) that assist the Company in identifying or consummating an
Initial Business Combination.
Note
7 — Stockholders’ Equity
Preferred
Stock — The Company is authorized to issue a total of 1,000,000 preferred shares of at par value of $0.0001
each. At December 23, 2020, there were no shares of preferred shares issued or outstanding.
Common
Stock — The Company is authorized to issue a total of 100,000,000 common shares of at par value of $0.0001
each.
On September 11, 2018, the Company issued 3,737,500
shares of common stock to its initial stockholders (the “Founder Shares”), for $5,000 in cash. On November 25, 2020,
the Sponsor contributed back to the Company 862,500 shares of Founder Shares for cancellation for no consideration. On October
14, 2019 and November 25, 2020, the Company issued to EarlyBirdCapital 200,000 and 150,000 representative shares, respectively,
at $0.0001 per share, for an aggregate of 350,000 representative shares. On December 21, 2020, the Company effected a stock dividend
of 0.2 shares of common stock for every share of common stock outstanding and EarlyBirdCapital returned to us for cancellation,
at no cost, an aggregate of 40,000 Representative Shares. As of December 23, 2020, there was 3,450,000 Founder Shares and 380,000
Representative Shares outstanding.
None
of the transactions mentioned above materially impacts the market value of the shares presented in the Company’s historical
financial statements, nor do they impact the market value of $10.00 per Unit regardless of the number of shares outstanding.
Therefore, according to accounting literature ASC 505-20-25, this transaction is not a stock split in substance, and no
retroactive adjustments to the shares outstanding presented in prior periods is required.
The
Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days
immediately following the date of the effectiveness of the registration statement of which this prospectus forms a part pursuant
to Rule 5110(g)(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(g)(1), these securities will not be sold during
the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days
immediately following the effective date of the registration statement of which this prospectus forms a part or commencement of
sales of the public offering, except to any underwriter and selected dealer participating in the offering and their bona fide
officers or partners, provided that all securities so transferred remain subject to the lockup restriction above for the remainder
of the time period.
Warrants —Each
whole warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to
adjustment as discussed below, at any time commencing on the later of 30 days after the completion of an Initial Business
Combination or 12 months from the closing of this offering and will expire on the fifth anniversary of the completion of an Initial
Business Combination, or earlier upon redemption or liquidation. However, no warrants will be exercisable for cash unless the
Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the
warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement
covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following
the consummation of Initial Business Combination, warrant holders may, until such time as there is an effective registration statement
and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on
a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption
is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on
a cashless basis. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares
of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”(defined
below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported
last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise.
The warrants will expire on the fifth anniversary of completion of an Initial Business Combination, at 5:00 p.m., New York
City time, or earlier upon redemption or liquidation.
The
Private Warrants, as well as any warrants underlying additional units the Company issue to Sponsor, officers, directors or their
affiliates in payment of working capital loans made to us, will be identical to the warrants underlying the units being offered
by this prospectus except that such warrants will be exercisable for cash or on a cashless basis, at the holder’s option,
and will not be redeemable by us, in each case so long as they are still held by the Sponsor or its permitted transferees.
The
Company may call the warrants for redemption (excluding the private warrants and any warrants underlying additional units issued
to sponsor, initial stockholders, officers, directors or their affiliates in payment of working capital loans made to us), in
whole and not in part, at a price of $0.01 per warrant,
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at
any time after the warrants become exercisable,
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upon
not less than 30 days’ prior written notice of redemption to each warrant holder,
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if,
and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock
splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period ending
on the third business day prior to the notice of redemption to warrant holders; and
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if,
and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.
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The
right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price
for such holder’s warrant upon surrender of such warrant.
If
the Company calls the warrants for redemption as described above, the management will have the option to require all holders that
wish to exercise warrants to do so on a “cashless basis.” Additionally, in no event will the Company be required to
net cash settle the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number
of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock
underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value”
(defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average
reported last sale price of the shares of common stock for the 5 trading days ending on the third trading day prior to the date
on which the notice of redemption is sent to the holders of warrants.
The
exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances
including in the event of a stock dividend, extraordinary dividend or the Company’s recapitalization, reorganization, merger
or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock
at a price below their respective exercise prices.
In
addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes
in connection with the closing of its Initial Business Combination at an issue price or effective issue price of less than $9.20
per Public Share (with such issue price or effective issue price to be determined in good faith by the Company’s board of
directors, and in the case of any such issuance to the Sponsor, initial stockholders or their affiliates, without taking into
account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent
more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Initial Business Combination
on the date of the consummation of the Initial Business Combination (net of redemptions), and (z) the Market Value is below
$9.20 per Public Share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater
of (i) the Market Value or (ii) the price at which the Company issues the additional shares of common stock or equity-linked
securities, and the $18.00 redemption trigger price will be adjusted to 180% of this amount.
Note
8—Subsequent Events
The Company evaluated
subsequent events and transactions that occurred after the balance sheet date up to the date that the balance sheet was
issued and has concluded that all such events that would require adjustment or disclosure have been recognized or disclosed.
F-13